August 17, 2023 (NO COMMENTS)

GFMA’s close-out framework put on hold as Isda reviews 1998 FX derivatives rule book

The Global Financial Markets Association has been forced to pause its work on developing a multilateral close-out agreement (MCOA) framework for foreign exchange contracts, as it awaits a potential update in the definition of a disruption event. The GFMA’s FX division (GFXD) had been working with law firm Linklaters to draft a currency-agnostic agreement that could be used to resolve deliverable FX trades such as spot, forwards and swaps when bilateral close-out efforts become chaotic.